Even with new covid variants threatening worldwide reopening and the supply chain, J.P. Morgan believes that full global economic recovery is coming in 2022.
On Wednesday, Chief Global Markets Strategist and Co-Head of Global Research Marko Kolanovic released a report saying that the bank expects U.S. S&P 500 ( (SPX) ) to rise 8% to 5050 points and an increase of 2.25% for 10-year Treasury yields.
"Our view is that 2022 will be the year of a full global recovery, an end of the pandemic, and a return to normal economic and market conditions we had prior to the COVID-19 outbreak," Kolanovic wrote in the firm's 2022 Year Ahead Outlook.
J.P. Morgan stressed that the "human toll" of COVID-19 has been great — despite vaccines and reopening, 2021 still saw more damage and human loss than 2020.
"In 2021, economies around the globe made great progress towards recovery and reopening," he wrote. "However, much remains to be done as the recovery was uneven, incomplete and often interrupted by new virus outbreaks and scares."
But amid wider vaccination and a better understanding of the virus, the investment bank's prediction is that the pandemic will finally be put behind us in 2022. The energy market, too, will react accordingly: J.P. Morgan predicts $86 a barrel for crude and $90 a barrel for Brent by the end of 2022. Emerging market stocks, meanwhile, are expected to rise by as much as 18%.
"As the recovery runs its course, markets will begin adjusting to tighter monetary conditions, a process that will likely inject volatility," Kolanovic wrote.